Company News

Directors’ Pay and Galliford Try – Apathy reigns

The pay of directors in FTSE100 companies continues to power ahead. Up 14% in the past year according to Income Data Services, based on median total remuneration.  This is six times more than the average earnings of all employees. The large increase has been driven by rises in the value of LTIPs (typically share-based pay-outs based on performance measures). These payments are often not at all obvious in Remuneration Reports at present. A good example is Galliford Try, the building company, whose AGM ...

Why should investors not see performance fee details at Northern VCT?

Northern Venture Trust (a VCT) introduced a management performance fee at a General Meeting on the 18th July. They did not have one before even though they had outperformed the very similar Northern 2 VCT over the last ten years who do. I spoke against the introduction of such a fee at the General Meeting, and raised questions about how the fees were to be calculated, as did another shareholder. The calculations were not at all clear from the meeting notice. As ...

Delcam succumbs to takeover offer

Software company Delcam has announced that it is recommending a cash offer of £20.75 per share from Autodesk for the company. That suggests an exit p/e of over 33 based on current year earnings forecasts which is surely enough to gain shareholder acceptance (they already have commitments to vote in favour from over 45% of shareholders). It rather demonstrates the high valuations currently placed on growing and profitable technology companies. ShareSoc first covered this company in our May 2011 newsletter when the ...

Co-Operative Bank Recapitalisation

The Co-Operative Bank has announced details of their revised plans for “recapitalisation” of the bank, which is a euphemism for rescuing it from potential bankruptcy. In effect the previous capital of the bank has been wiped out by dodgy lending, by inept acquisitions such as that of the Britannia B.S. and write-offs of IT expenditure. The existing institutional debt holders will have their debt converted to equity, plus will subscribe additional capital. The Co-Operative Group will put in an additional £462m of ...

Bulletin boards and Globo

I was at the Annual General Meeting of Ideagen yesterday (a full report is here), and happened to talk to one of the advisors present about recent events at Globo, another software company. We agreed there was a problem with bulletin boards that should be tackled. As mentioned in a previous blog entry, Globo has come under attack in the last few days on a number of bulletin boards and financial blogs for the quality of its business and its accounts (more ...

Globo, RM and Tesla Motors – What’s the connection?

Globo, RM and Tesla – what’s the connection? You will see. Globo managed to get their name mentioned in the Financial Times yesterday as coming “under pressure after bloggers question cash flow”. This probably refers to comments from Paul Scott on Stockopedia where he writes a daily small cap report which covered Globo on the 17th October. Not only were those comments spread around on bulletin boards but he and other folks have said similar things in the past. In essence what he ...

Problem companies – Hibu, Vicorp and Avia Health Informatics

News today on three companies in financial difficulties. Hibu (formerly Yell) have announced that they have received a requisition for a general meeting of the company, which they apparently intend to convene. They reiterate that shareholders will get nothing from their proposed restructuring where the debt holders will gain overall control and state that the board “is unanimously of the opinion that the proposed resolutions are not in the best interests of Hibu and its subsidiaries nor its key stakeholders including ...

What happens to bond prices if interest rates rise, and the latest Co-Op news.

If interest rates rise, what will typically happen to bond prices? That was a question posed to 30,000 US adults according to a report in the FT today. I would hope readers of this blog know the answer because it is quite important now that QE might be tapering off and interest rates rising. Only 28% got the answer right, which is of course that bond prices will fall. People buy bonds in the belief that they are “safer” than equities. It ...

Royal Mail IPO – the wrong kind of encouragement

There was a very intelligent letter in the FT today from a Dr Alex May. To quote: “I fear the sale will distort public perception of investing in shares”. It went on to suggest that it would mislead people into believing that making money in shares was easy, and implied it would encourage speculation rather than sound investment in a portfolio of shares. Even more astonishing was the revelation on the front page that some investment banks valued it at nearer the ...

Renishaw Profit Warning

No sooner had I completed an article for the latest ShareSoc newsletter on the wisdom of fund manager Harry Nimmo, with whom I had discussed Renishaw at the Standard Life UK Smaller Companies AGM, than moments later the former company issued a profit warning. Yes Renishaw issued an Interim Management Statement this morning which indicated revenue for the 3 months ending 30th September would be down from £92.2m to £75.2m compared with the prior year. The Far East, specifically China, was particularly ...